Implementing Highlighted CLS Features

Automatic Income Tax Calculations and Inventory Adjustments
CLS can automatically estimate your clients’ federal and state income tax obligations. To use this feature:

• Rates for federal, state, and “other” income taxes may be defined in SI 6.
• Use LI 3 (6) to set up the income tax calculation(s) for each client.
• You may also exclude certain account balances from the calculations. Use MF 1 to assign an H option to the account(s), and then enter the percentage to exclude.
• Each period, when all transactions for the period have been entered, use CT 6 to create the estimated income tax transactions. This routine may be run as often as necessary.
• To learn more about income tax calculations, refer to Chapter 5 of the CLS Getting Started Guide and to the relevant program documentation in the CLS Reference Guide.
  

Automatic Inventory Adjustments
If you use standard sales percentages for cost of goods sold (CGS), CLS can automatically create the CGS entries for up to twelve inventory accounts. Two types of transactions may be created: either “simple” CGS transactions, with a debit to cost of sales and a credit to inventory, or “perpetual inventory” transactions, which show both beginning and ending inventory on the P&L. To implement:

• Use LI 3 (5) to set up the inventory/CGS calculation(s) for each client. All inventory calculations for the client must use the same calculation type.
• Each period, when all transactions for the period have been entered, use CT 5 to create the inventory/CGS transactions. This routine may be run as often as necessary.
• To learn more about inventory/CGS calculations, refer to Chapter 5 of the CLS Getting Started Guide and to the relevant program documentation in the CLS Reference Guide.
  

Departmental Income Statements
You can easily create departmental income statements in CLS; CLS can handle up to 10,000 departments in a ledger. You can also prepare division-level financial statements. To implement a departmental P&L:

• In LI 3 (1), change the Income Statement Type to D.
• If the chart of accounts doesn’t exist yet, you may copy one from a non-departmental or a departmental client (don’t copy the departmental accounts).
• If you will need more than 99 departments, use LI 9 (8) to increase the size of the departmental portion of the account number.
• Use DF 1 to define the department numbers you want to use. You may also define divisions (where the department number contains at least one letter). Divisions are “reporting” entities only - all transactions must be posted to numeric accounts.
• You may use MF 6 to create the departmental accounts for a ledger; however, this step is necessary only if you plan to import transactions into CLS. The departmental accounts will be created automatically when transactions are entered using the ET program.
• When entering departmental transactions in ET, simply append the appropriate department number to the basic account number (e.g., 90301).
• You may print departmental or company-level financial statements, general ledgers, transactions registers and trial balances.
• To learn more about departments and divisions, or to implement a departmental balance sheet, refer to Chapter 5 of the CLS Getting Started Guide and to the relevant program documentation in the CLS Reference Guide.
  

Employee/Vendor Missing Information Report
Not sure you’ve entered all of the required employee and vendor information in CLS? You can print a list (or worksheet) of employees or vendors with missing social security numbers or missing address information. To use this feature:

• Select EL 4 to print a missing information list (or EL 5 for a worksheet), and select either the current ledger or all ledgers.
• If you choose all ledgers, select a specific calendar year and/or a specific payroll series type.
• You can include year-to-date gross on the report or worksheet, and you can exclude employees or vendors that fall below a selected minimum.
• To learn more about missing information reports/worksheets, refer to Chapter 3 of the CLS Payroll Guide.
  

Enforced Cosmetics
Enforced cosmetics causes titles, footnotes, datelines and account descriptions to appear on financial statements in a specific case, regardless of how they were entered. Use this option to clean up your financial statements, or simply to make them consistent for all clients. To implement this feature:

• Even though you can implement this feature on a ledger-by-ledger basis (using MF 9), it is much easier to set it up globally. In SI 1 (2,2), simply answer Y to Use These Global Settings.
• If the default settings are not correct, or you would prefer a different look, you may change the settings here.
• If there are specific words or abbreviations that you want to appear in a certain case, use SI 1 (2,3) to define them exactly as you want them to appear.
• If you want to print certain account descriptions exactly as entered, use MF 1 to place a Y option on these accounts.
• When you print financial statements, the selections you make here will be automatically applied.
• For more information, refer to the SI and MF program documentation in the CLS Reference Guide.
  

FICA Adjustments for Cash-Basis Employees
If your clients have cash-basis agricultural or household employees, CLS can automatically calculate the correct FICA to be reported and add it to their gross pay. To implement this feature:

• Use PF 1 to create a payroll series for the agricultural or household employees. In the Empl Options field, assign either an A or an H option. If the client has both types of employees, create a separate payroll series for each type.
• In PF 3, define columns for Gross Pay (*), Social Security (A) and Medicare (M), along with a column to hold the FICA portion of Gross Wages to be calculated by CLS (Y).
• In EF 1 to create a record for each agricultural or household employee.
• Use ET to enter the cash wages paid to each employee.
• Run CT 2 (1) to calculate Social Security and Medicare for each employee; the offset will be posted to the Y column on the payroll journal and to the appropriate account in the ledger.
• For agricultural employees, use TW 4 to prepare the 943 form.
• For household employees, the payroll journal (PJ) will provide the totals needed to complete Schedule H of the 1040 form.
• W-2s can now be printed for these employees.
  

Financial Statement Print Options (B,I,U)
Options in SI 1(2) will let you print titles on financial statements using bold, italics or underlines. This feature provides very professional looking statements. To implement this feature:

• It is easy to set up this feature globally. In SI 1 (2,1), simply answer Y to Use These Global Settings.
• You may accept the default settings or, if you prefer a different look, change them here.
• When the financial statements are printed, your choices will be automatically applied.
• You may also implement this feature on a ledger-by-ledger basis (by answering questions in LI 3 (1) and then applying the B, I or U options to specific title accounts in MF 1, but this approach is time-consuming and not recommended.
  

Income Tax Summary
If you are not using the CLS tax package interface, but would like to rearrange the balances on the client’s trial balance to facilitate tax package entry, set up an Income Tax Summary for the client. Assign each account to a line on the tax return; the printed report list account balances by line, and total them. If you use a standard chart of accounts, the setup can then be copied from one client to another.

• In LI 3 (1), answer Y to Use Income Tax Summary.
• Use MF 1 to associate a tax form, page, schedule and line number with each postable account.
• Use ML 5 to list the income tax summary setup information you have entered.
• At the end of the year, use TB 7 to print the income tax summary.
• You may use LI 2 (6) to copy the income tax summary setup to other ledgers.
• For more information, refer to the relevant program documentation in the CLS Reference Guide.
  

Leadsheets
Getting ready to do an audit? If the client is already set up in CLS, leadsheets for the client can be created using the TB program. Enter the adjustments when the audit is complete, and then reprint the leadsheets or trial balance in the leadsheet format. To implement:

• Use TB 6 (1) to define the leadsheets you will need (e.g. Cash, Accounts Receivable, Accounts Payable, etc.).
• Use TB 6 (3) to assign the appropriate accounts to each leadsheet.
• Use TB 6 (4) to print the initial leadsheets for the client.
• If needed, use LI 4 to enter a description for Source Code 18 (e.g., TB Worksheet-Adjustments). Answer Y to Use Source Code 18 as Standard Workpaper Entry. You may also enter descriptions for Source Codes 16 and 17 if some of your adjustments will be repeating or reversing entries.
• In ET, use Source Code 18 (and 16 or 17, as appropriate) when entering your audit adjustments.
• These audit adjustments will also appear on the Trial Balance Worksheet with Adjustments (TB 4 (2) or TB 5 (2)).
• For more information about leadsheets, refer to the TB program documentation in Chapter 3 of the CLS Reference Guide.
  

Pro Forma Journal Entries
If you have to enter the same journal entries each period, but with different dollar amounts, why not set them up as pro forma journal entries. Each period, simply enter the current amounts; CLS will then create transactions for the current period. You can even print worksheets to be used as input documents. To implement this feature:

• Choose Menu Selection 4 from the ET program menu.
• If you don’t see the ET menu when you select ET from the CLS Program Menu, change the answer to the Show ET Program Menu prompt to Y in LI 3 (1).
• Use ET 4 (1) to define your pro forma journal entries. Each journal entry can have an unlimited number of lines; the line sequence can be changed if needed.
• Each period, use ET 4 (2) to enter the new journal entry amounts and create transactions.
• If you wish, you may enter the amounts in ET 4 (2) without creating the transactions, review the journal entries using ET 4 (3), then create the transactions using ET 4 (4).
• You may use ET 4 (5) to print pro forma journal entry worksheets.
• For more information, refer to the ET program documentation in the CLS Reference Guide.
  

Ratio Analysis
Would you like to provide your clients with sophisticated ratio analysis reports? The CLS Ratio Analysis program offers twenty-six predefined financial ratios (including five Altman’s Z-Score ratios). You can include any or all of these ratios in your reports, or define new ratios as needed. You may also compare the current-year ratios to those for last year or to industry standards.

• Begin by using LI 2 (7) to copy Financial Ratio definitions from the JCC sample ledger; you must be logged onto the ledger where the ratio definitions are to be copied. If you can’t find JCC, look for it in the CLS program path - normally this will be c:\newcls).
• Using RA 1, select the reports you want to print. Assign an X option to a report to suppress it. You can also change a report title, select a comparative report or add/change a footnote.
• Use RA 2 to change a ratio category description or add new ones. Assign an X option to a category to suppress it.
• Use RA 3 to review or change accounts associated with the key words CLS uses when calculating ratios. This step is mandatory.
• Use RA 4 to change a ratio’s description or calculation method. Assign an X option to a ratio to suppress it.
• To enter industry standard figures for comparative reports, use RA 5. Last year’s ratios will be automatically derived from history maintained by CLS.
• Use RA 7 to print your selected financial ratios.
• The ratio setup you have defined for this ledger may now be copied to other clients as needed.
• For additional help in setting up financial ratios, refer to Chapter 3 of the CLS Reference Guide.
  

Special Format P&L
Use a special format P&L to change the sequence of columns on the P&L, or to add or delete columns, to provide a client with a custom income statement. Also, the special format P&L offers the only way to prepare a P&L containing "ratio" columns (e.g., $ per sq. ft., $ per patient day), or to compare actual expenditures with a total budget.